Relation-based systems and methods for fraud detection and evaluation

Abstract

A method for detecting fraud is provided in which a graph database of transaction relationships is constructed using transaction information for a plurality of transactions. Using the graph database, a plurality of account holder identifiers are associated into an account holder group. When transaction information for a new transaction associated with a transaction account holder identifier is received, a determination is made as to whether the transaction account holder identifier is in the account holder group. Responsive to a determination that the transaction account holder identifier is included in the account holder group, the new transaction information is compared to the transaction information for the account holder group and a fraud factor is determined for the new transaction. The fraud factor is indicative of a degree of similarity to the transaction information of the account holder group.

1 . A fraud evaluation system comprising:
 a server in data communication with a transaction database comprising transaction information for a plurality of transactions, the transaction information for each transaction including an account holder identifier and at least one transaction parameter; and   an automated data processor in data communication with the server, the data processor being configured to:
 construct a graph database of transaction relationships using the transaction information for the plurality of transactions, the graph database including a node for each transaction parameter of each of the plurality of transactions and an edge between all pairs of related nodes, each such edge representing a transaction relationship between node transaction parameters, 
 associate a plurality of account holder identifiers into an account holder group using the graph database to determine statistical similarities across transaction parameters and relationships for the plurality of account holders, 
 receive transaction information for a new transaction associated with an account holder in the account holder group, 
 compare the new transaction information to the transaction information in the graph database for the account holder group by positioning the new transaction in the graph database for the account holder group, 
 determine for the new transaction information from the relative positioning of new transaction nodes in the graph database for the account holder group, a fraud factor indicative of a degree of statistical similarity of the new transaction to the transaction information of the account holder group, 
 compare the fraud factor to a predetermined fraud threshold, and 
 responsive to a determination that the fraud factor exceeds the fraud threshold, halt processing of the new transaction. 
   
     
     
         2 . The fraud evaluation system of  claim 1 , wherein the at least one transaction parameter includes at least one of the set consisting of a transaction location, a transaction time, a transaction vendor, a purchase type, and a purchase amount. 
     
     
         3 . The fraud evaluation system of  claim 1 , wherein the transaction relationships are based on or include at least one from the set consisting of difference in time between transactions, relative location of transactions, difference in transaction value, relationship of merchants involved in transactions, and similarity of transaction subject matter. 
     
     
         4 . The fraud evaluation system of  claim 1 , wherein the account holder group includes only account holder identifiers associated with transactions parameters falling within a predetermined proximity of one another within the graph database. 
     
     
         5 . The fraud evaluation system of  claim 2 , wherein the automated data processor is configured to associate account holder identifiers into an account holder group based on statistical proximity of account holder transactions with respect to at least one transaction parameter. 
     
     
         6 . The fraud evaluation system of  claim 1 , wherein the automated data processor is further configured to:
 responsive to a determination that the fraud factor exceeds the fraud threshold, associate a fraud designation flag with the new transaction and transmit a notification to a client device associated with the account holder identifier for the new transaction.   
     
     
         7 . The fraud evaluation system of  claim 1 , wherein the automated data processor is further configured to:
 apply the fraud factor to a fraud score associated with the transaction to determine an updated fraud score,   compare the updated fraud score to a predetermined fraud threshold, and   responsive to a determination that the fraud score exceeds the fraud threshold, associate a fraud designation flag with the new transaction and transmit a notification to a client device associated with the account holder identifier for the new transaction.   
     
     
         8 . The fraud evaluation system of  claim 1 , wherein the transaction database receives new transaction information from a merchant device. 
     
     
         9 . A method for detecting fraud comprising:
 constructing a graph database of transaction relationships using transaction information for a plurality of transactions, the transaction information including, for each transaction, an account holder identifier and at least one transaction parameter selected from the group consisting of a transaction location, a transaction time, a transaction vendor, a purchase type, and a purchase amount, and the graph database including a node for each transaction parameter of each of the plurality of transactions and an edge between all pairs of related nodes, each such edge representing a transaction relationship between node transaction parameters;   associating a plurality of account holder identifiers into an account holder group using the graph database to determine statistical similarities across transaction parameters and relationships for the plurality of account holders;   receiving, by a transaction monitoring server from one of the set consisting of a merchant terminal, merchant server, and an account holder device, transaction information for a new transaction between a merchant and an account holder associated with a transaction account holder identifier, the transaction being processed by a transaction processor;   determining, by the transaction monitoring server, whether the transaction account holder identifier is included in the account holder group;   responsive to a determination that the transaction account holder identifier is included in the account holder group, the transaction monitoring server
 using the new transaction information to position the new transaction in the graph database for the account holder group, 
 determining for the new transaction from the relative positioning of new transaction nodes in the graph database for the account holder group, a fraud factor indicative of a degree of statistical similarity of the new transaction to the transaction information of the account holder group, 
 comparing the fraud factor to a predetermined fraud threshold, and 
 responsive to a determination that the fraud factor exceeds the fraud threshold, transmitting, to the transaction processor, an instruction to halt the new transaction. 
   
     
     
         10 . The method for detecting fraud of  claim 9  wherein, responsive to determination that the fraud factor exceeds the fraud threshold, the method further includes:
 associating a fraud designation flag with the new transaction, and 
 sending a notification to a client device associated with the transaction account holder identifier. 
 
     
     
         11 . The method for detecting fraud of  claim 10  wherein, responsive to determination that the transaction account holder identifier is included in the account holder group, the method further includes:
 applying the fraud factor to a fraud score associated with the transaction to determine an updated fraud score, 
 comparing the updated fraud score to a predetermined fraud threshold, and 
 responsive to a determination that the fraud score exceeds the fraud threshold, associating a fraud designation flag with the new transaction and transmitting a notification to a client device associated with the account holder identifier for the new transaction. 
 
     
     
         12 . The method for detecting fraud of  claim 10 , wherein, responsive to determination that the transaction account holder identifier is included in the account holder group, the method further includes:
 identifying a corroborating transaction in the transactions of the account holder group; and   adjusting at least one of the set consisting of the fraud factor and a fraud score based on the corroborating transaction.   
     
     
         13 . The method for detecting fraud of  claim 10 , wherein constructing the graph database comprises:
 creating a node for each of the plurality of transactions and associating the node with the at least one transaction parameter for the transaction;   connecting each node to at least one other node by an edge having a length representing a transaction parameter relationship between the transactions represented by the connected nodes.   
     
     
         14 . The method for detecting fraud of  claim 13 , wherein the transaction parameter relationship is based on differences in one or more corresponding transaction parameters for the connected nodes. 
     
     
         15 . The method for detecting fraud of  claim 13 , wherein associating a plurality of account holder identifiers into a an account holder group comprises:
 identifying all nodes within a predetermined statistical proximity of one another with respect to one or more transaction parameters,   determining the account holder identifiers associated with the nodes within the predetermined statistical proximity, and   associating the determined account holder identifiers into the account holder group.   
     
     
         16 . The method for detecting fraud of  claim 15 , wherein identifying all nodes within a predetermined statistical proximity of one another includes determining the mean and standard deviation of all edge lengths associated with the one or more transaction parameters. 
     
     
         17 . The method for detecting fraud of  claim 13 , wherein comparing the new transaction information to the transaction information in the graph database includes;
 positioning a new transaction node in the graph database based on the new transaction information, and   determining edge relationships between the new transaction node and the nodes associated with the account holder group.   
     
     
         18 . The method for detecting fraud of  claim 17 , wherein comparing the new transaction information to the transaction information in the graph database further includes;
 determining whether the new transaction node falls within the predetermined statistical proximity with respect to the one or more transaction parameters.   
     
     
         19 . A transaction processing system comprising:
 a transaction database configured for receiving transaction information associated with a plurality of transactions initiated at merchant transaction devices from the transaction data processing server and for storage of the transaction information for transactions associated with a plurality of account holders the transaction information including for each transaction, an account holder identifier and at least one transaction parameter; and   a transaction monitoring server in data communication with the transaction database, the transaction monitoring server being configured to:
 receive transaction information for the plurality of transactions from the transaction database, 
 construct a graph database of transaction relationships using the transaction information for the plurality of transactions, 
 associate a plurality of account holder identifiers into an account holder group based on a statistical transaction similarity determined using the graph database, and 
 upon receiving transaction information from a merchant transaction device for a new transaction associated with an account holder in the account holder group,
 compare the new transaction information to the transaction information in the graph database for the account holder group, 
 determine for the new transaction information a fraud factor indicative of a degree of similarity to the transaction information of the account holder group, 
 determine, based on the fraud factor, whether the transaction should be continued or terminated, and 
 responsive to a determination that the transaction should be terminated, transmit a termination notification to at least one of the group consisting of a transaction processing server, the merchant transaction device, and an account holder device associated with the account holder. 
 
   
     
     
         20 . The transaction processing system of  claim 19  wherein the termination notification includes the fraud factor.